The use of importance and performance analysis (IPA) to evaluate effectiveness of the forward auction market agro commodities: A case study

Abstract

The empowering auction market for commodities in East Java Province is one of five auction market revitalization programs conducted by the Republic of Indonesia c.q. Ministry of Trading started in 2014. One of the districts in East Java Province, namely Magetan District utilizes the commodity auction market to improve the competitiveness of their agricultural industry by shortening the supply chain. The Magetan District needs to evaluate their support for farmers or farmer groups to participate in the forward auction market (FAM). Implementation of the FAM commodities is divided into three main processes, namely pre-auction, auction, and post-auction. The auction market is organized to shorten the trading chain. Implementation of the FAM requires good planning, among Seller (namely Farmer or Farmer Group), organizer of Auction (namely Commodity Auction Company), Buyer, and Local Government (namely the farmer facilitator). This article is aimed to develop the instrument of a Performance Measurement Model Using Important and Performance Analysis (IPA) for Improving the FAM Effectiveness of Agro Commodity from Magetan District with Supply Chain Management approach. IPA is implemented at pre-auction, auction, and post-auction. The IPA model results in the diagram to decide the strategies in improving the FAM effectiveness, and then it can encourage farmers to improve welfare and realize the competitiveness of the auctioneer.